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Theranos' Elizabeth Holmes is giving away her shares to dodge lawsuits, report says

Anita Balakrishnan
David Orrell | CNBC. Partner Fund Management invested more than $96 million in Theranos in 2014, the company said.

Theranos founder Elizabeth Holmes plans to give out shares of her personal stake in the company to investors who promise not to sue the company, The Wall Street Journal reported on Thursday.

Investors in Theranos' latest funding rounds could get about two additional shares for each one they bought, according to the Journal, which cited unnamed people familiar with the matter. Investors likely paid $15 to $17 a share, but with the additional shares, the effective cost would now be lowered to about $5, the sources told the Journal.

Holmes would give up her majority stake in the start-up as part of the deal, which could potentially affect early shareholders such as Education Secretary Betsy DeVos, Walmart's founding family, and media titan Rupert Murdoch, the Journal reported.

Neither Theranos nor the organizations affiliated with named investors were immediately available for comment.

Though Theranos raked in more than $600 million in its latest funding rounds, it now has about $150 million or less in cash, excluding debt, a source told the Journal.

Theranos was founded by Holmes to realize the dream of testing blood by the drop, not the vial. But earlier reporting by the Journal called into question the efficacy of the blood tests, prompting investigations and sanctions from regulators.

Theranos has since promised to be more transparent about its technology.

For more on the story, see the article at WSJ.com.



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